In the world of licensing, compliance and legal issues, ‘I ACCEPT’ could perhaps be the most frequently used words in anything that is relatable to technology. Downloading an app, creating a new email account or even creating a twitter account – all of these acts require you to check on a particular box next to the statement ‘I ACCEPT’, thereby agreeing to a long set of terms and conditions before you can utilise any of it. But what are you actually agreeing to by clicking ‘I ACCEPT’?

So let’s talk about one of those issues that utilise the statement ‘I ACCEPT’ – software licensing.

According to the 2013 BSA Global Software Survey, 32% of the softwares in Singapore were installed without the proper licensing – i.e. they accepted terms and conditions without adhering to those clauses.

What are the implications? Companies utilising softwares with the proper licensing run the risk of having compliance and legal issues which can result in hefty fines. According the the same study, the total commercial value of these unlicensed softwares could amount to US$344 million in 2013.

While some enterprises might be deliberately using unlicensed softwares as a poor attempt to cut down on costs, there are other enterprises who are unknowingly putting themselves in legal and financial risks by not managing their software licenses actively.

However, having to navigate between the various types of licenses and the number of allowed users versus required users while being updated about their respective software versions can be too time-consuming and complex. Thus, software licensing management (SLM) is often a neglected admin task in most enterprises.

What is a software license?

A software license represents an agreement between your company and the owner of the software programme. This agreement dictates the various parameters on the usage of the software – number of users, duration of the license, ability to modify or redistribute the software etc.

Reading the End User License Agreement is a good start to find out the various ways you are able to use the software. Things to look out for would include the duration of the license (is it perpetual or a term license?), secondary or enterprise rights (can you install it on more than one devices for more than one user?), or the availability of volume licenses.

How to do this right?

Understand the terms and conditions behind each software license and keep a documentation of their respective details. Documenting these licenses has to be an ongoing task to ensure the company is proactive in SLM and prepared for any licensing audits.

Establish and enforce guidelines on the installation and usage of softwares. As an IT practitioner, it is common to come across employees sharing copies of a software without going through the proper channels. At times, some employees would install their own personal copies of the softwares at their corporate workstations as it seems easier and faster than going through the usual proper channels. The availability of easily-downloaded ‘free’ online softwares further put the company at risk. These are the common acts of software infringement.

Ultimately, while those two steps might help you to get control of the situation, it is important to be proactive about SLM to prevent any compliance issues. Putting an effective SLM in place can result in cost saving practices by reallocating or retiring unused licenses.